Some Florida Prepaid owners must pay $21,000 more

If you prepaid for college a few years ago, there's a good chance you'll need to shell out a lot more money for your child's tuition and fees.

People who buy Florida Prepaid college plans usually think they're covering most, if not all, of their child's future tuition. And that's true if you bought before February 2007 or since October 2010.

But if you bought a plan during that 3-1/2 year window, your plan may cover less than the half the actual tuition costs. Some plan holders say they've been ripped off.

"When I bought this, I thought I had locked in tuition," said Olga Cano of Coral Gables, who bought plans in January 2008 for two of her young relatives. "The costs have gone through the roof, and I think the whole credibility of the Prepaid plan has been damaged."

The issue: a tuition differential fee plan that Prepaid sold as an optional add-on during those years. About 117,000 tuition plans were sold during that time period, and only about a third of families bought the extra coverage.

The Legislature first authorized the universities to charge extra tuition in 2007. At that time, it was limited to the University of Florida, Florida State University and the University of South Florida. But the state later expanded it to all public universities and also authorized the schools to increase tuition by 15 percent a year. That caused Florida Prepaid prices to skyrocket for anyone who wanted to fully cover tuition costs.

Cano, a certified public accountant, said she found the pricing structure confusing and chose not to buy a tuition differential plan because she didn't realize it would be needed. She assumed the children would attend nearby Florida International University, which didn't charge extra tuition at the time.

"I thought it was a minor fee," Cano said. "The salesperson told me it was something at only a couple of universities, and it may go away."

But the legislative changes in 2009 turned the minor fee into a major one, and the cost of a differential plan more than tripled in one year.

Cano could have bought a differential tuition plan in 2008 for about $4,600 per child. If she wants to add the plan today, it will cost her more than $21,000 per child. She's written letters to legislators asking her to let her buy the supplemental plan at the old rate.

Prepaid spokeswoman Susan James couldn't be reached despite attempts to reach her by phone and e-mail Wednesday and Friday.

Thomas Wallace, executive director of the Florida College Prepaid Board., said in an October 2010 interview that the legislative changes and the large tuition differential plan increases prompted Prepaid to combine tuition and fees into one plan.

"Originally, the amount wasn't that significant," Wallace said. "But now when it's phased in, it's going to be such a significant piece, we thought it would be misleading to sell a plan without including it."

The public may not have fully understood all the changes in tuition, said Stanley Tate, a founder of the Florida Prepaid program who is no longer involved in its daily operations.

"No one ever made the statement in any of the brochures that this was an absolute requirement to gain admission," Tate said. "Whatever the charge is, they'll have to pay it unless they're covered."

Tate unsuccessfully lobbied the Legislature not to approve the tuition differential, saying it would make Prepaid plans, and college education in general, unaffordable for lower income families.

The university plan may be expensive, but Prepaid officials say it's no longer confusing.

The cost of a university plan for a newborn is now $49,293, triple what it cost five years ago. Families can also buy plans to attend state colleges, formerly known as community colleges, at much cheaper prices. Most state colleges now offer bachelor's degree programs.

If you want to supplement your plan to ensure your child is fully covered, or buy a new plan, you have until Jan. 31 to lock in this year's prices. You can get more information at stravis@tribune.com">http://www.myfloridaprepaid.com.